U.S. Markets closed

Detroit on track for first balanced budget in 13 years -mayor

By Peter Suciu

DETROIT, Feb 10 (Reuters) - Detroit Mayor Mike Duggan said the post-bankruptcy city will record its first balanced budget since 2002 when the current fiscal year ends on June 30.

"We still have to run a very tight budget every single week in order to stay on track," Duggan cautioned in his state of the city address on Tuesday.

He added that while Detroit must report to a state-created financial review commission, that oversight will end if the city pays its bills and balances its budget for three straight years.

"And that's the goal of every one of us up here," Duggan said, referring to members of the city council on hand for the speech.

Detroit exited the biggest municipal bankruptcy in U.S. history in December, shedding about $7 billion of its $18 billion of debt and obligations. The end of the historic bankruptcy also marked the departure of state-appointed emergency manager Kevyn Orr and the return of power to run the city to Detroit's elected officials.

Duggan said the city continues to work on the Great Lakes Water Authority, a deal between the city and three counties to regionalize water and sewer services. The deal, which was a key component of the city's debt adjustment plan, ran into a snag when Oakland County Executive L. Brooks Patterson raised concerns about the lack of new audited financial statements for the Detroit Water and Sewerage Department amid fears that declining revenue will lead to big rate increases.

A Feb. 6 order by Steven Rhodes, the U.S. Bankruptcy Court judge who oversaw Detroit's case, indicated that mediation was continuing over the water authority.

An exuberant Duggan said Detroit "is now on the road to recovery," pointing to successful efforts to save and rehabilitate houses, sell empty lots to neighboring homeowners, collect unpaid property taxes, fix street lights and improve bus service.

He said a new program will create an $8 million zero percent loan pool to fund home repairs for qualified homeowners. Another new initiative funded with money from the federal government and foundations - Motor City Match - will offer loan, grants and assistance to business entrepreneurs.

Duggan reported that once lengthy response times by police and emergency medical services have dropped, along with the number of carjackings and murders. He also pledged that Detroit will be a leader in requiring police officers to wear body cameras.

(Additional reporting and writing by Karen Pierog in Chicago; Editing by Ken Wills)